Datatec Strategic review

Strategic review to unlock embedded value IT services

31 August 2021 Datatec has announced a strategic review to ‘unlock and maximise shareholder value’ and ‘address the persistent gap between Datatec’s Price ZAR29.05 valuation and the inherent value of its underlying assets’. The solid Market cap ZAR5.9bn operating performance across all divisions in FY21 gives us reassurance ZAR14.7/US$ for Datatec’s interim results as the H122 reporting period ends, with strong Net debt (US$m) at 28 February 2021 60.9 industry growth globally. The positive anticipated H122 performance only Shares in issue 203.2m exacerbates the gulf in valuation between Datatec and its peers. We have left our estimates unchanged but have revisited our valuation analysis Free float 62% and, with all three divisions expected to perform well, our conservative Code DTCJ

SOTP analysis highlights potential upside of c 175% from current share Primary exchange Johannesburg price levels. As the global economy recovers, the shares offer defensive Secondary exchange N/A growth and an attractive yield, with the potential for significant upside as management (with a track record of deal making) unlocks this embedded Share price performance value. The group trades on 2.8x FY22e EV/EBITDA and 12.0x FY22e P/E.

Revenue PBT* EPS* DPS P/E Yield Year end (US$m) (US$m) (c) (c) (x) (%) 02/20 4,214 79.1 9.9 7.00 20.0 3.5 02/21 4,109 73.1 13.6 6.80 14.6 3.4 02/22e 4,317 79.1 16.5 5.50 12.0 2.8 02/23e 4,548 101.6 24.9 8.28 8.0 4.2 Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. % 1m 3m 12m Benign global outlook, bounce back in IT spending Abs The negative impact of the COVID-19 pandemic was relatively short-lived for the IT Rel (local) services sector. As the sector gathers pace, Gartner is projecting worldwide IT 52-week high/low ZAR31.5 ZAR20.0 spending totalling US$4.2tn in 2021, an increase of 8.6% from 2020, or 6.4% in constant currency terms (July 2021). Despite the COVID-19 pandemic continuing to Business description cloud the horizon, particularly in emerging markets, IT spending in 2021 is Datatec is a South Africa-listed multinational ICT projected to grow year-on-year in every region globally. business, serving clients globally, predominantly in the networking and telecoms sectors. The group operates through three main divisions: Westcon Sum-of-the-parts highlights investment opportunity International (distribution); Logicalis (IT services); Datatec’s broad comparator universe has seen an uplift from the COVID-19 and Analysys Mason (consulting). pandemic, enjoying further multiple expansion as investors have recognised the Next events sector as a safe haven with defensive growth characteristics once fears over the Trading update September/October 2021 pandemic started to abate. Datatec appears to have been left behind by this revaluation. By considering peer groups for each of its divisions individually, we Interim results 28 October 2021 estimate that Logicalis could be worth US$1.2bn, Westcon US$0.5bn and Analysys Analysts Mason US$0.2bn. This compares with the group’s current EV of US$462m. Richard Williamson +44 (0)20 3077 5700 Valuation: Significant embedded value Katherine Thompson +44 (0)20 3077 5730

[email protected] Although listed in Johannesburg, Datatec has negligible exposure to the South

African market, with the equity story being a dollar-denominated global ICT play. Edison profile page Despite this, the group currently trades on 2.8x EV/EBITDA and 12.0x P/E in FY22e, substantially below its peer group. This view is supported by a simple sum- Datatec is a research client of of-the-parts (SOTP) analysis, which suggests a group EV of c US$1.9bn and a fair Edison Investment Research value per share that is multiples of Datatec’s current share price. As confirmed by Limited the strategic review, management is committed to unlocking this underlying value.

Outlook: Strong growth as pandemic impact eases

Increased polarisation: Scale and specialisation The negative impact of the COVID-19 pandemic was relatively short-lived for the IT services sector. After the immediate transition to remote working, customers started to plan for longer-term digital transformation, with demand focused around public/hybrid cloud infrastructure, security, software- defined networking, cloud-based unified communications, remote collaboration tools and analytics.

Not only are end-users looking to accelerate the implementation of digital technologies, but they are also increasingly open to outsourcing the management of this infrastructure/application stack, driving greater annuity revenues and improving margins for service providers with the appropriate expertise. This factor appears to have principally benefited the scale players (ie those with a diversity of customers, a broad product range, strong vendor relationships and robust balance sheets), leaving smaller IT services companies at a competitive disadvantage.

With a diversified mix of businesses, a broad global presence and a strong balance sheet, Datatec has been well-placed to benefit from the recovery in global IT spending. Software and services (including annuity income) has continued to grow as a proportion of group sales (FY21: 47% of revenues) and, with management expecting many of the technology trends of FY21 to persist in FY22, the group retains its strategic focus on networking, security and cloud infrastructure. Bounce back in global IT spending underway After 2020, which could be characterised as a year of largely tactical IT investment in reaction to the COVID-19 pandemic, Gartner is projecting worldwide IT spending will total US$4.2tn in 2021, an increase of 8.6% from 2020, or 6.4% in constant currency terms (July 2021). Gartner is expecting companies to become more strategic in their digital transformation initiatives as the economy recovers, targeting investment in technologies with a clear business rationale.

Despite the COVID-19 pandemic continuing to cloud the horizon, particularly in emerging markets, Gartner projects IT spending to grow year-on-year in every region globally. Gartner’s growth projections also indicate continuing emerging market currency weakness relative to the dollar, with constant currency growth c 2.2% below nominal growth rates. As Datatec reports in dollars, any emerging market currency weakness will provide a marginal drag on its results. Sector performance has fed into valuations and M&A Recognising the resilience of the industry’s performance, share prices across the IT services sector have risen strongly following the initial impact of the pandemic, with investors increasingly recognising the sector’s defensive growth prospects both during the pandemic and as it abates. The average share price of Logicalis’s and Westcon’s peer groups (Exhibits 1 and 2) has risen by c 30% since the start of 2021.

This strong trading across the sector has driven corporate activity, including:

 Telefónica’s acquisition of Cancom’s UK and Ireland operations (July 2021) for €400m, at an FY20 EV/EBITDA multiple of 15.8x, strengthening its cloud and cybersecurity divisions and consolidating its digital transformation offering;

 Converge Technology’s three acquisitions of Vicom Computer Services for US$25m, Dasher Technologies for US$40m and ExactlyIT for US$26m (H121);

 ePlus’s acquisition of System Management Planning (January 2021);

 Synnex’s proposed merger with Tech Data (March 2021); and

Datatec | 31 August 2021 2

 Datatec’s own acquisition of Siticom (June 2021) to strengthen its advanced networking integration offering around 5G and cloud-based network interoperability.

Private equity has also been a visible buyer in the UK, with recent deals including:

 Platinum Equity’s acquisition of Ingram Micro for US$7.2bn from HNA (July 2021);

 Inflexion’s c £200m investment in ANS Group (June 2021), to be put together with its existing investment, UKFast, to create a leading UK hybrid cloud services provider; and

 August Equity’s buy-and-build investment in Integrity360 in June 2021.

Management has a history of strategic disposals

Looking back at Datatec’s long-term track record, there is a history of management making strategic disposals that have delivered attractive shareholder returns. Firstly, in 2004, Logicalis Australia/New Zealand was sold to IBM for US$66m; then in 2017, Logicalis SMC Netherlands was sold to DXC for US$42m; and most recently, in 2017, Westcon Americas was sold to Synnex for US$644m (US$630m paid in cash on closing, together with a US$14m earnout), with Synnex also taking an initial 10% stake in Westcon International for US$30m. These final two transactions led to special dividends of ZAR24 (US$1.72) per share being paid to shareholders in 2018 and 2020, contributing materially to the group’s total shareholder returns.

Defensive growth, significant upside potential

Turning to Datatec, all three of its divisions can point to a track record of solid profitability with the group’s core focus on software and services in networking, security and cloud infrastructure expected to deliver strong growth as the global economy recovers.

Despite this, to date the group appears to have been overlooked by the market as peer multiples have recovered post-COVID-19. Datatec currently trades on 2.8x EV/EBITDA and 12.0x P/E in FY22e, while our peer group indicates that a blended multiple of 12.8x EV/EBITDA or 20.8x P/E in FY22e could be justified. Our firm belief is that Datatec’s low relative valuation is retrospective and does not reflect the positive transformation management has achieved, Datatec’s improved operational performance since 2018 (64% EBITDA CAGR FY18–21) or the group’s future growth prospects. This view is further underlined by a simple SOTP analysis (below), which highlights the group’s embedded value in a sector actively targeted by private equity.

The announcement of the strategic review confirms that management remains committed to unlocking this underlying value on behalf of shareholders.

Valuation: Peer multiples coupled with sum-of-the-parts Focusing on peer valuations, Datatec’s broad comparator universe has seen an uplift from the COVID-19 pandemic, enjoying further multiple expansion as investors have recognised the sector as a safe haven with defensive growth characteristics as fears over the pandemic start to abate. We look at each of Datatec’s three principal businesses separately.

Logicalis: SOTP EV ~US$1.2bn Logicalis has an international peer group drawn principally from North America and Europe (Exhibit 1). These businesses have average FY1e gross margins of 22.4% and EBITDA margins of 8.1%, comparable to our FY22 estimates for Logicalis of 25.4% and 6.5% respectively. We avoid comparing sales multiples as these are complicated by differing policies internationally to recording

Datatec | 31 August 2021 3

revenues net or gross. The core peer group trades on a mean EBITDA multiple of 13.5x FY1e and 12.3x FY2e. Applying these multiples to Logicalis (working set out in Exhibit 4) leads to an enterprise value of c US$1.4bn. Allowing for minorities (principally a 35% share of Logicalis LatAm), we estimate that Datatec holds a weighted c 80% economic interest in Logicalis, implying a mid- range enterprise value of US$1.2bn. This compares to Datatec’s current group EV of US$462m.

Exhibit 1: Peer group for Logicalis – IT services companies Share Quoted EV Gross EBITDA EBIT EV/sales EV/sales EV/ EV/ P/E P/E Div price ccy ($m) margin margin margin 1FY (x) 2FY (x) EBITDA EBITDA 1FY 2FY yield 1FY (%) 1FY (%) 1FY (%) 1FY (x) 2FY (x) (x) (x) 1FY (x) Atea 171.4 NOK 2,284 20.3 4.1 2.6 0.5 0.5 11.9 10.3 24.4 19.5 3.6 Bechtle 60.74 € 9,072 15.0 6.5 5.0 1.2 1.1 18.6 17.3 34.6 31.5 0.8 Cancom 54.42 € 2,251 30.8 10.8 9.6 1.3 1.2 12.0 14.1 37.3 33.6 1.3 CDW Corp 198.07 US$ 30,662 17.1 8.4 7.8 1.5 1.4 17.8 17.2 25.7 23.6 0.8 Computacenter 2860 GBp 4,741 13.1 4.7 3.5 0.5 0.5 11.5 11.3 20.9 20.4 1.9 Converge Technology 10.73 C$ 1,528 23.5 6.8 3.1 1.2 0.9 17.8 10.5 45.7 19.1 NM Econocom Group 3.39 € 1,316 21.0 6.8 5.1 0.4 0.4 6.1 5.9 9.7 8.7 3.4 ePlus 105.26 US$ 1,360 25.3 8.8 8.4 0.8 0.8 9.1 9.0 14.3 14.4 NM Insight Enterprises 98.7 US$ 3,816 15.5 4.4 3.9 0.4 0.4 9.6 8.9 14.4 12.9 NM Reply 171.7 € 7,354 NM 16.8 13.6 4.3 3.8 25.4 23.0 45.1 39.9 0.4 Sopra Steria Group 168.4 € 4,983 42.7 11.3 7.1 0.9 0.9 8.1 7.3 16.0 13.5 1.6

Mean 22.4 8.1 6.3 1.2 1.1 13.5 12.3 26.2 21.6 1.7 Median 20.6 6.8 5.1 0.9 0.9 11.9 10.5 24.4 19.5 1.4 Source: Refinitiv (priced at 30 August 2021)

Westcon International: SOTP EV ~US$550m As with Logicalis, Westcon’s peer group (Exhibit 2) is principally drawn from North America and Europe. The average gross margin for Westcon’s peers is 9.5%, with EBITDA margins of 3.4%, compared to our FY22 estimates for Westcon of 11.3% and 1.9% respectively. Setting aside sales multiples for the reasons stated under the Logicalis paragraph, the peer group averages 9.6x FY1e and 9.1x FY2e EV/EBITDA. Applying these multiples to Westcon International (working set out in Exhibit 4) would indicate an enterprise value of c US$600m. Factoring in Datatec’s 92% economic interest (8% is held by Synnex) indicates a valuation for Datatec’s interest of c US$550m.

Exhibit 2: Peer group for Westcon International – IT distribution companies and resellers Share Quoted EV Gross EBITDA EBIT EV/sales EV/sales EV/ EV/ P/E P/E Div price ccy ($m) margin margin margin 1FY (x) 2FY (x) EBITDA EBITDA 1FY 2FY yield 1FY (%) 1FY (%) 1FY (%) 1FY (x) 2FY (x) (x) (x) 1FY (x) Also Holding 293 CHF 4,183 5.6 2.1 1.6 0.3 0.3 13.6 12.5 23.0 20.3 1.4 Arrow Electronics 120.77 US$ 10,730 11.2 4.7 4.2 0.3 0.3 6.6 6.4 8.9 8.4 0.0 Avnet 40.46 US$ 5,041 12.3 3.6 3.0 0.2 0.2 6.7 6.7 9.1 9.0 2.2 Esprinet 15.6 € 1,048 4.7 1.6 1.4 0.2 0.2 10.8 9.6 18.5 15.6 2.1 Scansource 35.28 US$ 980 11.4 3.9 3.2 0.3 0.3 7.6 6.8 10.9 9.8 NM SYNNEX Corp 127.81 US$ 6,544 7.0 3.3 3.1 0.3 0.3 9.1 8.4 15.5 14.4 0.0 Wesco International 116.28 US$ 10,232 20.4 6.2 5.1 0.6 0.5 9.2 8.4 13.3 11.4 NM WPG Holdings 47.65 TWD 7,383 3.7 2.0 1.7 0.3 0.3 13.4 13.8 7.9 8.4 8.1

Mean 9.5 3.4 2.9 0.3 0.3 9.6 9.1 13.4 12.2 2.3 Median 9.1 3.4 3.0 0.3 0.3 9.2 8.4 12.1 10.6 1.8 Source: Refinitiv (priced at 30 August 2021)

Analysys Mason: SOTP EV ~US$210m Analysys Mason’s peer group (Exhibit 3) is weighted towards North America over Europe, as this is where the majority of consultancies are listed. The peers indicate average FY1e gross margins of 42.8% and EBITDA margins of 18.0%, compared to our FY22 estimates of 43.2% and 15.1% respectively. The peer group trades on a mean EV/sales multiples of 3.6x and 3.3x, and average EV/EBITDA multiples of 18.1x and 17.0x for FY1e and FY2e, respectively. Applying these multiples

Datatec | 31 August 2021 4

to Analysys Mason (set out in Exhibit 4) indicates an enterprise value of c US$210–280m, falling to a mid-range valuation of c US$210m once Datatec’s 82% economic interest is accounted for, with the remainder held by the consulting partnership.

Exhibit 3: Peer group for Analysys Mason – IT consultancies Share Ccy EV ($m) Gross EBITDA EBIT EV/sales EV/sales EV/ EV/ P/E P/E Div price margin margin margin 1FY (x) 2FY (x) EBITDA EBITDA 1FY 2FY yield 1FY (%) 1FY (%) 1FY (%) 1FY (x) 2FY (x) (x) (x) 1FY (x) Accenture 333.23 US$ 212,683 32.6 18.8 15.1 4.2 3.8 22.4 20.3 37.8 33.8 1.1 Booz Allen Hamilton 81.11 US$ 13,192 54.3 10.8 9.3 1.6 1.5 14.5 13.6 19.3 17.5 1.9 Capgemini 190.7 € 44,547 34.2 15.5 11.5 2.2 2.0 13.9 12.9 23.4 21.1 1.1 Forrester Research 46 US$ 837 59.8 13.6 11.5 1.7 1.6 12.6 11.3 25.4 21.2 NM FTI Consulting 140.78 US$ 4,960 31.2 12.8 11.2 1.8 1.7 14.1 12.3 21.9 18.9 NM Gartner 306 US$ 27,263 69.1 25.6 21.5 5.9 5.2 23.1 26.6 39.2 45.7 0.0 GlobalData 1540 GBp 2,607 44.9 32.9 27.5 10.0 9.4 30.5 26.8 50.5 43.1 1.2 Huron Consulting 49.05 US$ 1,356 28.8 11.0 7.5 1.5 1.4 13.8 12.1 18.9 16.7 NM Wipro 9 US$ 44,082 30.1 21.1 17.5 NM NM NM NM 30.7 28.5 0.7

Mean 42.8 18.0 14.7 3.6 3.3 18.1 17.0 29.7 27.4 1.0 Median 34.2 15.5 11.5 2.0 1.9 14.3 13.2 25.4 21.2 1.1 Source: Refinitiv data (priced at 30 August 2021)

Significant embedded value within the group Applying the mean EV/sales (where relevant) and EV/EBITDA multiples from each of the core comparator groups above, it appears that the current market valuation implies a significant discount to Datatec’s peers. We do not believe this level of discount is justified as, based on peer multiple analysis, a valuation for either Logicalis or Westcon alone would be worth more than the current entire group enterprise value.

By our calculation (Exhibit 4), having adjusted the three divisional valuations for minority interests, applying a nominal 10x EV/EBITDA multiple to group central costs (which we estimate at c US$15m for FY22 and FY23) and applying a subjective discount of 30% (to allow for sovereign risk, the conglomerate structure and other discount factors), the group SOTP valuation is still multiples of Datatec’s current share price.

Exhibit 4: Sum-of-the-parts analysis Enterprise value Implied EV based on Datatec effective Mean EV Per share (US$m) Revenues EBITDA economic interest 2022e 2023e 2022e 2023e Logicalis 1,829* 1,762* 1,417 1,464 80% 1,152 Westcon 825* 842* 588 604 92% 549 Consulting 281 275 213 244 82% 208 Central costs (150) (150) 100% (150) Sum of the parts (EV) 1,759 Assumed average FY22 net debt** (184) SOTP – equity value 1,575 Discount for: RSA sovereign risk, holding company risk 30% Adjusted equity value 1,103 Shares in issue (m) 203.2 SOTP value per share (US$) 5.43 SOTP value per share (ZAR) 79.77 Latest share price (ZAR) 29.05 Upside from latest share price 175% Source: Edison Investment Research. Notes: *Due to differences in how peers report revenues (net or gross), we have disregarded sales multiples in calculating a valuation for Logicalis and Westcon. **As year end net debt is typically a low point in the annual cycle, we have assumed average net debt through the year is c US$100m higher than year-end levels. If the group’s embedded value can be effectively unlocked, our SOTP analysis points to the potential for the group’s valuation to more than treble from current levels.

Datatec | 31 August 2021 5

We recognise that there are a number of specific risk factors relevant to the equity story, including sovereign risk, emerging market exposure and currency risk, limited institutional investor liquidity, a lack of peers on the Johannesburg Stock Exchange, with direct peers listed in Europe or North America, high (but reducing) exposure to a single vendor (Cisco) and the conglomerate discount. We would also note that, although recovering, group EBITDA margins (Logicalis – 7%, Westcon – 2%, Analysys Mason – 15%) remain below their respective peer group averages for FY22.

However, we also recognise that management has delivered a strongly improving operational performance across all three business lines since 2018, despite the impact of the COVID-19 pandemic in FY21, delivering an EBITDA CAGR FY18–21 of 64% and 43% CAGR in EPS FY19– 21. The group has a strong balance sheet with low net debt (FY21: US$61m), which has delivered strong cash generation and allowed management to restart dividends (FY21: 3.4% yield).

Although listed in Johannesburg, Datatec has negligible exposure to the South African market, with the equity story being a dollar-denominated global ICT play. Despite this, Datatec is valued at a substantial discount to its global peer group, currently trading on 2.8x EV/EBITDA and 12.0x P/E in FY22e. It also trades on a 64% discount to our SOTP valuation. Given Datatec’s historical performance and medium-term growth prospects, we do not believe that this valuation discount is fully warranted.

With management clearly positioning Datatec as an international investment story, and assuming a continued strong operating performance, we expect the peer group discount to narrow materially over time. However, we also recognise that full closure of the discount to fair value may require further simplification of the group’s corporate structure.

Management remains committed to unlocking this underlying value.

Datatec | 31 August 2021 6

Exhibit 5: Financial summary

Year end 28 February US$000 2019 2020 2021 2022e 2023e INCOME STATEMENT IFRS IFRS IFRS IFRS IFRS Revenue 4,332,381 4,214,421 4,109,463 4,316,503 4,548,473 Cost of Sales (3,644,637) (3,472,843) (3,418,926) (3,589,219) (3,773,478) Gross Profit 687,744 741,578 690,537 727,284 774,995 EBITDA 86,761 158,657 118,632 163,070 185,253 Normalised operating profit 89,727 105,157 97,868 105,613 130,149 Amortisation of acquired intangibles (10,217) (11,297) (8,635) (8,586) (8,046) Exceptionals (21,323) (3,700) (27,771) (6) (6) Share-based payments (9,764) (7,623) (11,493) 0 0 Reported operating profit 48,423 82,537 49,969 97,021 122,098 Net Interest (22,577) (25,874) (25,692) (26,560) (28,525) Joint ventures & associates (post tax) (1,403) (204) 908 0 0 Exceptionals (228) 2,029 55 0 0 Profit Before Tax (norm) 65,747 79,079 73,084 79,052 101,624 Profit Before Tax (reported) 24,215 58,488 25,240 70,460 93,573 Reported tax (20,959) (31,809) (19,540) (31,707) (37,429) Profit After Tax (norm) 17,554 34,615 30,035 43,479 60,975 Profit After Tax (reported) 3,256 26,679 5,700 38,753 56,144 Minority interests (1,816) (13,772) (3,103) (10,180) (10,478) Discontinued operations 11,694 1,332 0 0 0 Net income (normalised) 15,738 20,843 26,932 33,299 50,497 Net income (reported) 13,134 14,239 2,597 28,573 45,666

Average number of shares outstanding (m) 237.8 210.5 198.6 201.8 203.2 EPS - normalised (c) 6.62 9.90 13.56 16.50 24.85 EPS - diluted normalised (c) 6.55 9.74 13.20 16.07 24.21 EPS - basic reported (c) 5.52 6.77 1.31 14.16 22.48 EPS - Company underlying uEPS (c) 6.61 9.90 13.56 16.50 24.85 Dividend (c) 0.00 7.00 6.80 5.50 8.28

Revenue growth (%) 10.4 (2.7) (2.5) 5.0 5.4 Gross Margin (%) 15.9 17.6 16.8 16.8 17.0 EBITDA Margin (%) 2.0 3.8 2.9 3.8 4.1 Normalised Operating Margin 2.1 2.5 2.4 2.4 2.9

BALANCE SHEET Fixed Assets 437,786 512,598 554,690 586,356 620,633 Intangible Assets 284,877 291,279 314,486 333,525 349,507 Tangible Assets 60,306 43,300 39,987 39,469 41,600 Right-of-use assets 0 83,953 94,837 107,983 124,147 Investments & other 92,603 94,066 105,380 105,380 105,380 Current Assets 2,284,521 2,083,928 2,242,568 2,355,228 2,480,642 Stocks 332,256 253,271 242,005 263,893 287,778 Debtors 1,258,853 1,110,510 1,108,105 1,193,253 1,291,165 Cash & cash equivalents 344,400 347,189 488,632 493,178 495,607 Other 349,012 372,958 403,826 404,905 406,093 Current Liabilities (1,909,272) (1,765,823) (1,980,013) (2,079,906) (2,186,085) Creditors (1,358,928) (1,259,013) (1,385,208) (1,455,970) (1,529,510) Tax and social security (15,826) (16,677) (16,596) (16,596) (16,596) Short term borrowings (413,770) (338,945) (392,877) (412,671) (434,848) Lease liabilities 0 (34,325) (36,398) (38,232) (40,286) Other (120,748) (116,863) (148,934) (156,437) (164,844) Long Term Liabilities (100,805) (187,610) (176,624) (184,945) (194,268) Long term borrowings (31,383) (18,638) (42,371) (44,506) (46,897) Lease liabilities 0 (95,148) (77,847) (81,769) (86,163) Other long term liabilities (69,422) (73,824) (56,406) (58,670) (61,207) Net Assets 712,230 643,093 640,621 676,734 720,923 Minority interests (63,303) (70,778) (57,465) (67,645) (78,123) Shareholders equity 648,927 572,315 583,156 609,089 642,800

CASH FLOW Op Cash Flow before WC and tax 117,848 169,980 157,896 163,076 185,259 Working capital (19,941) 57,231 79,903 (36,274) (48,257) Exceptional & other (28,917) (11,642) (28,293) (6) (6) Tax (38,531) (36,941) (36,597) (31,707) (37,429) Operating cash flow 30,459 178,628 172,909 95,090 99,567 Capex (36,886) (28,036) (35,145) (36,036) (36,971) Acquisitions/disposals (25,318) (9,179) (3,694) 0 0 Net interest (22,434) (25,874) (25,692) (26,560) (28,525) Equity financing (43,881) (51,683) (2,808) 0 0 Dividends (53) (15,137) (4,905) (11,174) (16,831) Other 1,991 20,019 1,880 (44,459) (45,830) Net Cash Flow (96,122) 68,738 102,545 (23,139) (28,590) Opening net debt/(cash) 6,380 100,753 139,867 60,861 84,000 FX (15,116) (9,270) (11,312) 0 0 Other non-cash movements 16,865 (98,582) (12,227) 0 0 Closing net debt/(cash) 100,753 139,867 60,861 84,000 112,590 Source: Datatec accounts, Edison Investment Research

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